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Friday, February 21, 2014

Recently, Gov. Haslam proposed TN Promise, which offers free tuition to community colleges and the state's tech centers.
Lottery reserve dollars will be used to create an endowment to pay
future ongoing expenses. There was some criticism in that to pay for
the program, the policy proposes to lessen the support for 4 year
colleges from $4,000 per year to $3,000 for freshman and sophomores but
increases the amount for juniors and seniors from $4,000 to $5,000 per
year.

I think it's a good policy for reasons I explain below.

1. TN is still in a bad place when it comes to postsecondary completions.
Compared to other states, we still have comparatively low outcomes,
for comparatively much higher costs. When we think of the Return on
Investment implications in spending state money for higher ed (subsidy
support for higher ed institutions, HOPE scholarships), it's not good.

For
TN public 4 years, only 45.5% graduate in 6 years (less than half) and
only 19.7% graduate in 4 years. The chart below that shows that TN is
much higher in educational spending per completion than many other
states:

For
TN public 2 years, it's much worse. Only 11.3% graduate in 3 years, and
only 8.0% graduate in 2 years. The chart again shows that TN is much
higher in educational spending per completion for 2 years than many
other states:

By
providing tuition support, the TN Promise Initiative will help move the
needle on the really subpar 2 year college graduation rates, and will
likely improve the Return on Investment of state dollars being spent on 2
year public colleges.

For
4 years as well, shifting greater support to junior and senior years
incents more completion at the 4 year level. Ultimately, this will help
improve the 4 year grad rates, which also need significant improvement.

Providing
marginally less support in the freshman and sophomore years - $1000
each year, doesn't seem like it would be the make or break reason
students leave during these years. Financial pressures are present
every year for a student at a 4 year program, but I think it makes a lot
of sense to put greater incentives in later years - years 3 and 4 (the
scholarship amount increase) - than the beginning years when students
may drop out for primarily non-financial reasons.

2. The policy proposal that will bring more equity to how TN Lottery Dollars are allocated. As I've previously pointed out in this post, TN Lottery dollars
derive the majority of their revenues from poor Tennesseans (who are
more likely to play the lottery), but then the majority of dollars are
allocated to families that already have the means (via HOPE
scholarships), or close to the means to cover public higher education
tuition.

By
providing greater support for 2 year students out of reserve lottery
funds (which tend to be lower-income), this seems more equitable for how
HOPE scholarship dollars are put to use. I actually think there is
some strong underlying morality in this policy proposal, something that
we don't see every day from public officials.

3. Tuition out of pocket costs for students may slow.

This
was one of the Governor's talking points, and seems realistic. A
number of students can complete 2 year associate's degrees, and then
transfer to a TBR or UT System 4 year school to complete a 4 year
degree.

Getting the first two years paid for can be a big
financial help to students, dramatically cutting the total cost of a
postsecondary degree. It's a page out of the Zach Bissonette playbook.

One
potential side effect this policy proposal is that if demand for the 4
year colleges declines, enrolling less students each year because
students are going to 2 years, 4 year universities may feel inclined to
raise tuition prices at an even further rate than they would otherwise.
Yet, I don't think this is too concerning, because there is already lots
of consternation out there with student loan debt and tuition hikes -
there's a limit to what people are willing to pay, and subsequently,
what universities can charge.

4. Lottery dollars just sitting in a reserve account aren't helping students. This was state Senator Jim Kyle's main point and he's right. Put the money to use for Tennessee students.

The
TN Promise proposal looks like a good higher ed policy proposal on a
number of fronts, putting money to use instead of just sitting around.
Tennessee has a long way to go for improving 2 year and 4 year higher
ed graduation rates, and it looks like this is a good policy to help
with that.

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As the author of A Disgruntled Republican I often post items which I think may be of interest to the conservative, Republican, libertarian or the greater community. Posting of a press release or an announcement of an event does not necessarily indicate an endorsement. Rod

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